Qualiance International IPO

GMP History

Strengths

• ✓Qualiance International claims to have an in-house manufacturing facility in Tiruppur, Tamil Nadu, with a built-up area of over 45,000 square feet. The company claims to follow quality control processes, including fastness, shrinkage, seam leakage, and button pull testing.
• ✓Qualiance International claims to derive most of its revenue from international markets, particularly Switzerland and the United States. Revenue from Switzerland increased from Rs 20.83 crore (56.44%) in FY24 to Rs 31.09 crore (58.87%) in FY25 and Rs 61.54 crore (80.67%) in FY26. Revenue from the United States contributed Rs 10.66 crore (28.87%) in FY24, Rs 17.28 crore (32.71%) in FY25, and Rs 12.67 crore (16.60%) in FY26. The company claims that higher and repeat orders from Switzerland contributed to this growth.
• ✓The company claims to have over 20 years of experience in manufacturing uniforms and outerwear for departments of the Government of Switzerland, including military and police agencies. The company claims to undertake specialised processes such as seam sealing, laser cutting, ultrasonic welding, and bonded assembly in-house. Revenue from Swiss government departments contributed Rs 60.45 crore (79.24% of total revenue from Switzerland) in FY26, Rs 30.41 crore (57.58%) in FY25, and Rs 20.58 crore (55.76%) in FY24.
• ✓The company has seen a consistent increase in revenue from operations and PAT. Revenue from operations increased from Rs 37.23 crore in FY24 to Rs 53.07 crore in FY25 to Rs 76.89 crore in FY26, while PAT increased from Rs 2.84 crore in FY24 to Rs 4.90 crore in FY25 to Rs 11.87 crore in FY26.

Risks

• !Qualiance International derives a significant portion of its revenue from woven garments. Woven garments contributed Rs 54.58 crore (71.55%) in FY26, Rs 38.23 crore (72.39%) in FY25 and Rs 25.05 crore (67.87%) in FY24. This concentration exposes the company to changes in demand, competition, pricing pressures, and evolving customer preferences. Any sustained decline in sales of woven garments could adversely affect its revenue and financial performance.
• !The company derives nearly all of its revenue from a limited number of customers and does not have long-term purchase commitments with them. The top 10 customers contributed Rs 76.02 crore (99.65%) in FY26, Rs 52.66 crore (99.70%) in FY25, and Rs 36.62 crore (99.21%) in FY24. The loss of key customers, reduced orders, or vendor rationalisation could materially affect revenue and financial performance.
• !The company derives a substantial portion of its revenue from exports, exposing the business to international trade and country-specific risks. Export revenue stood at Rs 75.39 crore (98.82%) in FY26, Rs 49.58 crore (93.87%) in FY25 and Rs 32.40 crore (87.77%) in FY24. Changes in trade policies, tariffs, tender regulations, local sourcing requirements, geopolitical conditions, or foreign currency movements could adversely affect export orders, profitability, and financial performance.
• !Qualiance International is exposed to foreign exchange risks due to its export-oriented business and imports of certain raw materials and goods. Fluctuations in exchange rates may affect the value of export earnings when converted into Indian rupees and increase procurement costs if the Indian rupee depreciates. Currency volatility may also affect pricing, margins, budgeting, and cash flows. Ineffective hedging or payment delays could further result in foreign exchange losses.
• !The company depends on a limited number of suppliers for its raw material requirements. Purchases from the top five suppliers accounted for Rs 12.24 crore (44.25%) in FY26, Rs 16.77 crore (46.72%) in FY25 and Rs 7.32 crore (41.90%) in FY24. Any disruption in supplies, delivery delays, quality issues or loss of key suppliers could affect production schedules, order fulfilment, operations, and profitability.
• !The company, its promoters, and directors are involved in ongoing tax proceedings. Any adverse judgments in the cases could be detrimental to the company’s business prospects.
• !The company has reported negative cash flows from operating, investing, and financing activities in the past. Cash flow from operating activities was negative at Rs 4.45 crore in FY25, primarily due to an increase in inventory and partial offset by a decrease in trade receivables. Cash flow from investing activities remained negative at Rs 2.61 crore in FY26, Rs 4.38 crore in FY25, and Rs 0.44 crore in FY24. Negative investing cash flows were primarily associated with the purchase of fixed assets and capital work in progress, along with changes in loans, advances, and fixed deposits. The company also reported negative cash flow from financing activities of Rs 4.99 crore in FY26 and Rs 1.60 crore in FY24, primarily due to repayments of borrowings and finance costs. Continued negative cash flows could affect the company's liquidity and financial flexibility.
• !As of FY26, the company’s trade receivables were Rs 15.99 crore. Any failure to collect these receivables on time or at all can negatively impact the business and its financial condition.
• !As of FY26, the company had outstanding financial indebtedness of Rs 28.50 crore. Any failure to service or repay these loans can harm the company’s operations and financial position.

About Qualiance International

Qualiance International is engaged in the design, engineering, manufacture and export of performance garments for institutional, government, and brand clients in international markets. Its product portfolio includes military uniforms, tactical outerwear, high-visibility workwear, weather-resistant and all-weather outerwear, police and border patrol uniforms, protective workwear, and performance activewear. The company operates a manufacturing facility in Tiruppur, Tamil Nadu, with an installed capacity of 450,000 garment pieces per annum. The facility also undertakes specialised processes such as seam sealing, bonded construction, ultrasonic welding, laser cutting, and lamination. The company primarily generates revenue from exports to clients across Europe and North America. It holds certifications including ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 14064-1:2018, SA 8000, Global Organic Textile Standard and Global Recycle Standard certifications, and has undergone a Sedex Members Ethical Trade Audit. It also holds Two Star Export House status from the Government of India. Use of proceeds: This is a fresh issue of shares. Therefore, the net proceeds from the fresh issue will go to the company. They will be utilised for the following purposes: Funding the capital expenditure requirements of the company towards setting up a new manufacturing facility at Tiruppur, Tamil Nadu – Rs 38 crore General corporate purposes